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Globalization and/or Sustainability
25
PUBLIC GOOD TENETS
1. NON-RIVAL: anyone competes for grabbing this good benefit.
2. NON-EXCLUSION: the external benefit cannot be internalized.
GLOBAL PUBLIC GOOD TENETS
3. SUPRANATIONAL nature.
4. INTERGENERATIONAL
5. Nobody controls or steers its benefits.
(NOTE: Hence, sustainability is a sort of global public good and responsibility is only an externality).
1. Sustainability strategies of the companies are one of the pillars on which it has settled its obligation.
2. The network society and the implementation of information technology (IT) bring new forms of cooperation and new forms of production compatible with traditional ones.
3. The environment of the networked society bring us new patterns of networking between different organizations profiles (eg: clusters).
4. But also economic globalization has led multinational corporations to acquire a power which is sometimes higher than States where they operate, so that its impact is growing depending on its responsibility.
Subject 2. Sustainable development
Sustainability vs responsibility
And Sustainability, what sort of good is it?
Subject 03.
1. How has "the role played by companies" changed in a globalized environment?
- Two views to point out the current functioning of global markets:
1. WEF: globalization is the only way to end human poverty is inevitable and it is a consequence of technical progress.
2. WSF: The more globalization grows, the worst poor people live. Another World Is Possible!!!
http://tinyurl.com/JnJ2012Sustainability
- Since 1989, globalization has become more visible in the vector of changes in society and the economy.
- Globalization has helped companies to gain power worldwide.
Subject 03.
1. How has "the role played by companies" changed in a globalized environment?
https://www.youtube.com/embed/wEr2SRDGs3A?feature=player_detailpage
Economic Globalization + Global Hyper Consumption Models + Weakening of States + Absence of multilateral real counterweight
https://www.youtube.com/embed/kioTfWx9ruM?feature=player_detailpage
- By the time, it's remained important debates about the direction of globalization should take, the different approaches are underlying the role of public and private. Meanwhile the production and market models are transforming.
- Hyper-specialization is the transformation of institutions in network models (long term models).
- Companies with globalization have evolved and changed their production processes, distribution and marketing, using geographic and temporal flexibility to adapt to the environment (relocation).
Reduction of trade barriers +
+ New Information Society +
+ Public Good Paradigm Changes +
+ Internet +
+ Networked Society +
+ Human Development =
GLOBALIZATION =
https://www.youtube.com/embed/Vcjp7GKdn1I?feature=player_detailpage
We need to move the firms' dominant scheme power to coherent social responsibility to let them manage the Globalization challenge.
Globalization
vs Sustainability
Topic 00
Globalization Drivers:
Subject 03.
2. Does the network society establish new mechanisms for cooperation among stakeholders?
knowledge
- It is the consequent of a change on public good paradigm
- Information Technology (IT) is concerned with technology to treat information. The acquisition, processing, storage and dissemination of information by a microelectronics-based combination of computing and telecommunications, are its main fields.
ITs
network
society
Information
people
interdependent world
- The IT have brought the faster change in the history of humanity and has given us a new model of network society.
- New dominant social structure: network society of the information economy + information economy + virtual culture.
r
International businesses
do not appear as ISOLATED GROUPS whose only concern is money making, but as institutions inside of a GLOBAL world trying to work hand in hand with citizens, governments, social organizations and other peer organizations in order to build a good society, even in a global context. Also, this context demands good relations and sustainable behaviors
to operate properly
Subject 03.
3. What sort of roles can "or" should the companies play in business sustainability?
a. Globalization has allowed us to recognize those affected by the business and established meeting places and new kind of companies.
b. New kind of companies (= holdings):
- 1. "Companies as authors of development": create jobs, build wealth, bring us technological innovation and new systems of business cooperation (eg: cluster or holdings).
- 2. "Hybrid Companies": companies benefit from the initiative of the participants and the participants of group work. "Doing well by doing good" (eg: Android, Fedora, Tata Nano).
- 3. "Social Enterprises": companies without loss and without dividends (eg: Grameen Bank -micro credits).
Subject 04.
What are the consequences of not to participate?
Subject 03.
3. What sort of roles can "or" should the companies play in business sustainability?
c. New kind of companies (= service): Service-dominant logic is a services-centered alternative to the traditional goods-centered paradigm for describing economic exchange and value creation.
Services systems is to connect people, technology, and information through value propositions with the aim of co-creating value for the service systems participating in the exchange of resources within and across systems.
Services is an experience occurring in the front office but services have opened the back office to public to promote confidence and quality.
Subject 02. Sustainability
a. Kuznets DEF (1960s): "Sustainability is a way to avoid society inequalities in the long term for our next generations".
b. Brundtland Report DEF (WCED - 1987): "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs". (Modern Definition of Sustainable Development: It contains within it two key concepts: the concept of needs, in particular the essential needs of the world's poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization)
c. Dow Jones Sustainability Index DEF(2002): "Corporate sustainability is a business approach that seeks to create long term value for shareholders by taking advantage of opportunities and the effective management of risks inherent in developing economic, enviromental and social"
The four reasons why the DJSI definition is relevant:
1. Corporate sustainability is an economic approach, from the beginning is linked to core business activities, not philanthropy or social action.
2. To create long term value for shareholders, has to do with the performance of long-term investment, not speculative short. The top most sustainable companies generate better returns than those without a sustainability plan.
3. By taking advantage of opportunities, the public agenda creates new business opportunities: energy efficiency, education, inclusion, accessibility ... there are only consult the European agenda 2020 to understand.
4. The effective management of risks, reduces the risk premium in the market, especially in a situation of lack of confidence and trust as being generated by the economic crisis.
Loss of funding
Loss of reputation
internal and external
impact
Loss of market share
and business niches
Exclusion of international rankings
Loss position in the sector
Subject 03. Globalization. Why?
The globalization ideas try to answer, among others, some key questions:
1. How has "the role played by companies" changed in a globalized environment?
2. Does the network society establish new mechanisms for cooperation among stakeholders?
3. What sort of roles can "or" should the companies play in business sustainability?